UpdateDutch DSM Q1 net profit surges to €130m

28 April 2010 11:09  [Source: ICIS news]

(Recasts lead to reflect net profit; adds operating profit figures for other segments in paragraph 6)

SINGAPORE (ICIS news)--Dutch producer DSM’s net profit in the first quarter surged to €130m ($171m) from €13m in the same period a year earlier, given strong performance across its business segments, it said on Wednesday.

It added that its cost savings initiatives taken last year was also paying off.

Net sales from continuing operations in the January-to-March 2010 period rose 24% to €2.09bn, while overall operating profit surged nearly fourfold  to €218m, it said in a statement.

"Operating profit from our core businesses is not only up very strongly compared to first-quarter 2009, it has also returned to the level achieved in first-quarter 2008. This reflects the cost savings initiatives taken last year, which already deliver €200m  on an annualized basis,” said Feike Sijbesma, chairman of DSM.

The company had benefited from improved business conditions in most geographic areas and end markets, which resulted in a significant improvement in its operating profit, it said.

DSM’s polymer intermediates segment posted a first-quarter operating profit of €43m against an operating loss of €30m year in the previous corresponding period, reflecting strong demand from China and an increase in raw material prices, it said. 

The company’s base chemicals and materials segment, meanwhile, posted a first-quarter operating profit of €18m, reversing a loss of €15m in the year-ago period. Likewise, its performance materials segment posted an operating profit of €43m, from a loss of €17m in the same period last year.

Strong demand from emerging economies and from the automotive, electronics and textile markets had helped the recovery of the materials sciences businesses, DSM said in its report.  

DSM’s nutrition cluster continued to show healthy volume growth at price levels that were comparable to the last quarters of 2009, while the pharma segment faced lower volumes compared to the fourth quarter of 2009, it added.

Looking ahead, DSM was committed to increasing its presence in the China market where net sales had more than doubled in the quarter to $405m compared to the first-quarter of 2009, it said

“Whilst uncertainties remain in the medium-term economic outlook, the strong first-quarter result and continued positive business conditions give us confidence that 2010 will be a good year for DSM," Sijbesma said.

DSM said it expected sales volumes at the polymer intermediates segment to be lower in the second and third quarters of 2010 due to planned turnarounds.

With additional reporting by Priya Jestin  

($1 = €0.76)

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By: Nurluqman Suratman

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